10 Digital Marketing Trends for Japan 2018

Digital Marketing Trends for Japan 2018

Staying up to date on new developments within the field is crucial to success in digital marketing. As we look towards 2018 there are a number of key concepts and trends which we have identified as likely to be at the center of marketing conversations both in Japan as well as around the globe in the coming year.

In addition to explanations we have also included a few examples that illustrate how companies in Japan are approaching these various topics.

Digital Transformation

What Digital Transformation Entails

Digital transformation (DX) refers to the ongoing process of change within companies in order to better incorporate and apply digital technologies at all levels of their operations.

The impetus behind digital transformation is not only advances in technology, but also changes in consumer demand and competition—enabled in large part by said new technology. Indeed, legacy companies in particular have had to deal with new entrants who are more adept at utilizing the latest technologies in this evolving ecosystem in ways that better meet consumer demand. Additionally, these larger companies usually face organizational challenges which can delay or inhibit their ability to successfully transform their businesses.

But digital transformation is not only a topic for large companies, small and medium-sized enterprises (SMEs) must also address issues relating to digitization and its effect on their respective businesses. Some of the challenges SMEs can face include limited resources and knowledge pertaining to digital marketing, despite having more flexibility with their organizations.

Regardless of the size of an organization though, the effects of this digitization are wide-reaching. Digital transformation not only impacts marketing and distribution channels, but also impacts the products and services firms offer and even, in some cases, the very business models these companies were built on.

Digital transformation is not simply about connecting IT to business though.

The major focus with digital transformation is ultimately the customer and the customer experience.

Digital Transformation in the Manga Publishing Industry

Let’s take a look at publishing. Specifically, the Japanese publishing industry and manga.

The aim of this example is not to make a jab at an established industry (i.e. publishing) that has often been the poster child for the “old ways vs. new ways” narrative. No, in fact print is still here, relevant, and there are a growing number of indications that would seem to suggest that it will continue to exist alongside digital.

What makes this example pertinent to the topic at hand is that it really shows some of the macro-level challenges involved with digital transformation, while also allowing us to look at smaller, more industry specific issues.

The Shift Towards Digital

One of the biggest ways digital transformation has come to light in manga publishing in Japan has been in its distribution channels. Digital distribution of content, such as music or eBooks, has come a long way, and with advances in mobile technology—and the proliferation of smartphones—it is easier than ever to access content wherever, whenever.

This has resulted in consumers with very different expectations and demands. Although in Japan this was not as big of an issue, where a strong distribution network that allowed readers and fans easy access to published manga content, whether in the form of magazines or bound volumes (tankōbon) existed. Where this really became an issue was in the global market.

Due to things such as negotiations surrounding licensing and distribution agreements, followed by subsequent translation and localization, readers who could not wait for the latest release in a world where nearly everything is instantaneous began using aggregate sites to read fan-translated, digitally scanned and uploaded versions of comics (so-called “scanlations”) instead of purchasing official releases of print or digital comics.

This degree of anticipation and of desperately wanting to know what happens next is not a new phenomenon when it comes to serialized works. Indeed, back when Charles Dickens was writing The Old Curiosity Shop, eager fans in New York shouted to the boat that was carrying shipments of the final installment inquiring about the fate of a main character, Little Nell. However, technology has changed where this type of exchange might occur (i.e. online) and has enabled fans many other means of finding out what happens next.

Luckily for manga publishers’ bottom line, the biggest market is Japan—1 in 4 books sold here is a manga—and while globally the genre’s popularity has grown, it is still very much a niche hobby or interest at best. This meant that legacy publishers still maintained a certain sense of security in their model until quite recently. However, with advances in technology, especially mobile, and changing customer behavior now apparent in Japan as well, new types of publishers who got their start in digital publishing and not in traditional print have burst onto the scene. Take for example Manga Box, a manga magazine mobile app from DeNA that allows readers to access manga from their smart devices.

Manga Box serializes its various manga titles on the app, and physical comics are later made available in collected anthology (tankōbon) format. In other words, Manga Box foregoes printing weekly or monthly magazines. The app is free to download and, with some caveats, free to use: only the most recent chapters (in most cases the latest 12 chapters) are available to read for free, which encourages people to either pay for access or to buy the physically printed volumes. The benefit of this model to users, is that when readers start and follow a series from when it is first released they can read for free.

This type of business model, which relies primarily on digital distribution and smartphones (i.e. mobile first), did not exist for more established, manga publishers, and is a perfect example of how disruptive newcomers can carve out a place for themselves in an industry. In other words, digital transformation can introduce new competition who create new products and services, and in the process upend entire business models.

The issue with the way manga is distributed, especially abroad, has been clear to those in the manga publishing industry for a while. Decision makers and executives alike knew that in the rapidly digitizing world there would be a major problem with the business model, one heavily reliant on printed magazines and bound volumes, that had served them well for so long. But, as is the case with most established industries, change cannot be implemented so quickly.

But don’t count publishers out just yet. More recently, traditional publishers of manga in Japan have come out with their own apps and services which have adopted the look, as well as many of the features, of the services from newcomers like Manga Box.

However, major issues remain for manga publishers in their digital transformation in that 1) these publishers’ business model originally relied on print, unlike their new digital rivals, which means publishers must find ways to maintain print while integrating it with digital and 2) they still must deal with the changing demands from customers, especially abroad, who have come to expect nearly instant gratification.

The case of manga publishing in Japan is one of the best examples of an industry dealing with the various aspects of digital transformation as it truly highlights the challenges organizations face in this endeavor. The issue of new channels and incorporating them into an existing framework especially brings us to another big topic for 2018, omnichannel.

Omnichannel

Omnichannel is a topic of particular interest to retailers and companies that are heavily involved in eCommerce, and is also very much so a part of the concept of digital transformation which we discussed above.

You may already be familiar with the concepts of multichannel and cross-channel. Given the way technology and consumer behavior has changed, omnichannel (sometimes written as omni-channel or omni channel) is the next logical development.

Let us first start with multichannel. Multichannel is basically the recognition that there are various channels customers interact with and businesses should consider establishing a presence at each of these touchpoints. Touchpoints include physical stores, websites, mobile apps, as well as social media.

The concept behind multichannel is all about providing customers with choice. Customers have multiple channels to access, use, and interact with a company or service, and they can choose which channel suits them best. This in turn gives that business more ways to reach their audience. However, multichannel essentially ends with establishing these various channels.

Cross-channel, is an intermediary step between multichannel and omnichannel. Unlike with multichannel, where competition exists between channels, the goal of cross-channel is for the various channels to complement one another. For example, if a customer ordered a product online, they can pick it up in-store.

Omnichannel, on the other hand, is not only about having various channels and connecting two together, but finding a way to integrate all these channels across the variety of devices a customer may use while also maintaining a consistent design or feel throughout. By doing so, as the rationale goes, customers will have a better overall experience. Encouraged in part by this interconnectivity, omnichannel also has a strong emphasis on real-time data shared across platforms.

As early as 2012 Google reported that consumers take a multi-device path to purchase. Additionally, studies have found that today’s customers have a growing tendency to use two channels simultaneously. For example, someone may consult their smartphone while browsing in-store, or surf the web on their tablet while watching TV. As a result, with omnichannel, there is an element of real-time—especially in the case of customers checking current stock levels on the company’s website or app while in-store.

With this in mind, the ambition behind omnichannel is to provide customers with a seamless user experience that remains consistent no matter what channel they choose. In other words, omnichannel is based on a customer-centric marketing approach.

Here’s an example of what omnichannel retailing might look like in practice:

You see a promotion for a product while browsing a brand’s app

You go to the store to check it out in person

The item isn’t out on display so you check the store’s homepage on your smartphone which says it should be in stock at this location

You show your phone to a store clerk who takes out an iPad and confirms they should have the item in stock

The clerk goes to the back and finds that the item simply hadn’t been put on display

You decide to buy the item and at the register you open the brand’s app with a scannable loyalty or point-type “card” which you present to the clerk

Your card is scanned and you proceed to pay for and complete your purchase

The next time you log into your account on your computer or open your phone app, the product shows up under past purchases and you are given recommendations for other products based on this purchase

This is just one way in which a brand might implement omnichannel in their retailing. Examining your own customers’ respective journeys (multi-channel funnels are great for this) can provide insights about how your brand might best employ an omnichannel strategy.

Examples of Omnichannel in Japan

One of the best examples of a Japanese brand that is utilizing an omnichannel strategy is MUJI. MUJI is a Japanese retailer which is well-known for its emphasis on design and lack of prominent branding or logos on their products, instead espousing a more minimalistic aesthetic. The full Japanese name for the brand, mujirushi ryōhin is often translated into English as “no brand quality goods.”

Not only is MUJI a great example of omnichannel retailing practices within Japan, but they are also one of the best examples among Japanese companies that are looking beyond the domestic market. Currently MUJI is expanding their global operations beginning with Asia, where they have enjoyed a great deal of popularity in countries like China. Future plans include further developing the brand in Europe and the US, where MUJI is much-loved within the design community, but still relatively unknown to wider audiences.

But back to the Japanese domestic market. In their home market, where MUJI is an established player, their omnichannel activities place them among the top ranks of companies, across a number of industries. In addition to offering a mobile app, MUJI’s website (mobile-responsive of course) also allows visitors to check in stock items at each individual store.

MUJI has also done a good job of incorporating social media as a channel as well. In fact, MUJI’s social media and app have both contributed to increase sales. In a survey on purchases as a result of a brand’s posting on social media conducted by Nikkei Business Publications, 8.3% of those who made purchases at MUJI did so as a direct result of posts they saw on social media.

For a Japanese brand, MUJI’s social media following is what we would consider exceptional. Take their Instagram account for example: MUJI started their account in 2015 and as of December 2017, they have over 800k followers. Given Instagram’s relatively recent rise to relevancy in Japan, what stands out is how MUJI’s account following quickly exceeded even their Twitter account, which is a big deal because Twitter is so widely-used in Japan.

Not only does omnichannel have real benefits for the consumer, in that it offers a seamless user experience, for businesses as well omnichannel provides multiple benefits.

For brick and mortar retailers it allows for the integration of traditional channels with new digital channels. This provides a way to make a physical store an asset that can actually be leveraged against online competitors. For traditional retailers and digital retailers alike, omnichannel provides more ways to obtain valuable data on customers’ preferences and behavior, while integrating this into one cohesive profile of a specific customer. This makes it possible to create more robust personas which can then be used for better segmentation and targeting.

Of course, if it seems that many of the issues that omnichannel seeks to address is aimed at larger companies, especially retailers, that is to be sure. For smaller companies this kind of integration may not necessarily come into play. Furthermore, the point of omnichannel is NOT for a company to invest in all channels simply to have all channels. However, it is still wise to be aware of this shift in the way business is being conducted, as this ultimately plays a role in shaping consumer expectations for all businesses.

By leveraging the various channels and integrating them into one seamless experience, MUJI has been able to improve their business. Given the fact that more customers are shopping both online and in-stores, an omnichannel strategy is definitely worth considering, as the MUJI example proves.

Marketing Automation

While marketing automation has been a fixture in the US for some time, it has only really started to catch on in Japan since 2014. As more Japanese companies proactively embrace digital transformation within their organizations marketing automation is attracting more interest.

The term marketing automation is used both to describe automating tasks via software as well as to refer to the marketing automation software itself. Marketing automation can be used by businesses to automate repetitive processes and tasks in an effort to improve efficiency and generate higher ROI for marketing spend across channels.

A big part of marketing automation is gathering customer data. Using marketing automation tools and software, brands can make campaigns that are sent only to those who complete certain actions.

One of the most widely used applications of marketing automation is email marketing. Marketing automation is much more than email marketing though. Examples of some of the other areas in which marketing automation are applied include: social media management, lead nurturing, and marketing analytics.

Email Marketing

As mentioned above, one of the core concepts behind marketing automation is gathering data and information that can then be used to improve your digital marketing efforts. With more data you will have a better understanding of who your customers are, allowing you to make more detailed personas that your brand can then use to target a specific audience in an optimal way. In other words, instead of sending the same email to everyone of your customers or people on your mailing list, you can send messages catered to people who would most likely be responsive to your offer.

Marketing automation is also useful for businesses that want to scale by becoming more efficient.

Social Media Management Platforms

Social media can be time-consuming. For businesses of any size automating certain aspects of your social media activities can save time and also improve efficiency. For example, by scheduling tweets or Facebook posts a month in advance during a single planning session is a much better use of time than tweeting or posting one at a time.

Furthermore, it’s generally accepted that the times at which you post can play a role in social media performance, so you want to post when your followers are most active. However, with limited staff, you might not be able to post when you need to. Preparing posts in advance make time-sensitive posting much easier.

For large companies, the scale of their operations have long made marketing automation attractive. However, with a variety of options now readily available for businesses of all sizes, small and medium sized businesses (SMEs) are also implementing marketing automation. With many marketing automation tools also allowing the ability to conduct A/B testing and coming with built-in analytics, expect to hear a lot more about marketing automation in Japan in 2018.

Chatbots

These days you may have noticed a growing number of businesses utilizing chatbots when you visit their webpage or use apps such as Facebook messenger. With messaging apps being the most widely used type of app, many businesses are choosing messaging apps as a platform for their chatbots to better meet their customers’ needs on the platforms they are most likely to be on.

Not only big businesses but small and medium-sized businesses too have begun to implement chatbots to provide customer service.

What is the Rationale Behind Chatbots?

As AI has become more sophisticated, and capable, businesses have realized the opportunity for chatbots to handle certain aspects of customer service.

In the face of high customer expectations—50% of customers expect businesses to be open 24/7—chatbots can help businesses provide customer assistance whenever a customer needs it. While some chatbots are basically automated FAQs, others utilize machine learning and predictive intelligence allowing them to be far more conversational.

Another way in which chatbots are useful is that they allow customers to quickly find answers to basic problems, while freeing up customer service representatives to handle more difficult issues a caller may have.

Examples of Chatbots in Japan

The Lawson chain of convenience stores in Japan has been utilizing it as part of their digital marketing strategy. Lawson has a chatbot, named Akiko, on SNS messaging app, Line.

By communicating with the Lawson chatbot, customers can get information on new products or find nearby stores.

Geomarketing

Geomarketing refers to marketing activities that utilize or incorporate geolocation data. Thanks to the proliferation of various smart devices with built-in GPS features, marketers have more location-based data at their disposal than ever, which is why geomarketing is attracting a lot of interest from Japanese brick and mortar businesses.

The term geomarketing encompasses both “geotargeting” and “geofencing”. Geotargeting is the act of delivering content based on both current and previously visited locations, while geofencing simply means using location data to target users within a specific area, often in real-time.

The ability to target users based on their geographic location provides a number of useful applications for digital marketers. However, location data also plays a role in the move towards greater personalization. A move with the proposed value being that users are provided more relevant content, which results in a better experience for the customer and better conversions for businesses.

Applications of Geomarketing

Some of the basic applications for geomarketing, as referred to above, include providing different content depending on the geolocation of an individual. For example, when searching for outdoor shops, being given a list of shops closest—and most convenient—to you, rather than only the biggest or most famous ones.

For brick and mortar stores especially, geomarketing tactics such as geofencing can offer ways to help increase sales through location data available in real-time. According to Google, 84% of smartphone shoppers use their phone in-store to help them shop, so in this case a store might decide to offer in-store promotions aimed at smartphone users. Or, a push notification from a coffee shop you like might be sent out when you enter an area with one of their stores.

Finally, based on places a person has visited, businesses can also retarget them. A business could choose to send an email with a coupon or show ads to a person that visited their shop recently, in an attempt to make a sale from an individual who has already shown interest.

Geomarketing has a lot of potential in a country as densely and highly populated as Japan. Which is why we think geomarketing is a topic worthy of this list.

Inbound Marketing

Without getting into the debate surrounding the word “content” itself, inbound marketing and content marketing are topics once again at the top of digital marketers’ minds.

As search engine algorithms continue to grow more sophisticated, content that is most relevant to users is being rewarded with better ranks in search engine results. The effect of this focus on “relevancy” by search engines has been a change in the efficacy of certain SEO tactics brands could previously employ, and a revived interest in providing content which is relevant and of value to users as a way to attract potential business.

Another reason for the growing interest in inbound marketing in Japan is due to the growth in popularity of various SNS apps and services such as Instagram. On the other hand, as the most popular SNS platforms continually move towards pay-to-play models, businesses with smaller advertising budgets will turn to creating more content in order to help promote their brand.

Inbound marketing encompasses many different types of content, however, we have decided to focus further discussion on the top three types of inbound marketing content which we anticipate Japanese brands to concentrate more of their efforts on in 2018.

Social Video Marketing

As we have discussed in our article talking about trends in social media for 2018, social video marketing is expected to get even bigger in the coming year. You only need to take a quick glance at your social media feed to see how the amount of video content compared to purely static images or text on social media platforms has surged in the past year and a half.

Of course, video ads which scroll before a video plays have been a feature of YouTube for quite some time. However, as mobile internet speeds have improved and smartphones have become ubiquitous, other social media platforms have started to move towards more traditional advertising models, like that employed by TV, to the point we are now seeing more video ads on our smart devices as well.

For example, employment search engine, Indeed, is running a series of ads here in Japan as part of a campaign aimed at increasing awareness of their service. The video ads are shown on social media platforms like Instagram.

With videos currently enjoying higher rates of engagement across all SNS platforms than other types of media, digital marketers and advertisers alike will be looking to utilize video in their efforts to boost engagement while also reaching a greater number of potential customers.

Another reason social video marketing is becoming popular is because it enables greater creativity, especially when paired with video editing apps or apps that have augmented reality filters, like Snapchat or Snow.

Another style of video which has become more prominent in Japan on social media is time lapse. Videos which show processes in a sped up and simplified manner, such as how to cook a pasta dish or apply makeup, are becoming increasingly popular. Time lapse itself isn’t a new technique, but its use and prominence on social media is quite recent. We expect to see many other industries producing video content specifically for social media using time lapse in 2018.

Ephemeral Content

Snapchat which pioneered the concept of messages, pictures, and videos disappearing after 24 hours after uploading, and Instagram, which quickly followed suit with its “Stories” feature, are the biggest names in the game. Expect to see even more ephemeral content on social media in 2018 with bigger brands now beginning to get in on the trend of content that vanishes after a day.

Things to keep in mind about ephemeral content

Teens are currently the biggest users of ephemeral content. That means that your brand gets the most out of targeting users within this age demographic.

There aren’t really analytics or metric tools, however, so it’s all about impressions at the moment.

How are Businesses Using Ephemeral Content?

With content disappearing after 24 hours, ephemeral content partially benefits from the fear of missing out (FOMO) which encourages users to actually take a look, knowing that they might not have a second chance to see the content.

Zozotown, a popular online shopping platform in Japan, makes use of Instagram Stories to promote new products as well as announce deals and discounts.

Some argue that ephemeral content may be perceived as being more authentic, due to the rough, unpolished nature of videos and shots. Indeed, since ephemeral content is so short-lived, not only is it not in the spirit of the concept, but there is little to be gained with heavy editing. For this reason, some brands are utilizing ephemeral content to provide real, behind the scenes looks into their brands operations and activities.

Finally, the ability to create a chain of videos and/or photographs lets you get creative and employ storytelling techniques into your content marketing. This documentary style of ephemeral content is pretty much the whole concept behind Instagram Stories.

Influencer Marketing

Influencer marketing has continued to grow as brands increase their efforts on social media. As brands attempt to leverage influencers’ significant followings, however, there is also concern about a lack of transparency and results.

As we mentioned in our article about social media best practices, properly vetting influencers is key to successful partnerships. This means not only seeing if an influencer, as well as their followers, fit in with your brand’s image and target audience, but also determining what their actual reach is for sponsored posts.

Recently, there has been a surge of interest in so-called, micro-influencers. Micro-influencers generally have a more modest following—in the tens of thousands—as compared to the hundreds of thousands or millions of followers of bigger influencers, with many operating in very specific geographic locales or within specific niches.

Brands like partnering with micro-influencers because they typically enjoy higher engagement (relative to the number of followers) and they also usually have lower costs.

While there is still no truly authoritative data or studies regarding the efficacy of influencer campaigns—results vary wildly from brand to brand and campaign to campaign—but as part of the many options available to promote your brand, influencers are definitely worth considering in 2018.

Filter Bubble

The filter bubble is a direct result of the push towards personalization.

From personalized search engine results and SNS ads that take data such as browsing history into account, personalization is simply the way of the internet these days. In a quest to provide “better” service to users of search engines and SNS platforms alike the theory is that a personalized experience not only results in higher conversion but is also preferred by users.

The danger of this quest for ever greater personalization for every person is the creation of echo chambers, or filter bubbles, in which people are no longer presented with new information or exposed to lines of thought that they may not necessarily agree with. Instead we are only shown things which we have already indicated that we enjoy, prefer, or are likely to purchase, reinforcing previously held beliefs and attitudes. This is by no means, limited strictly to perceptions of brands and products either.

What marketers have come to realize is that personalization, might therefore, also have real weaknesses that must be recognized before embarking on any campaign. Indeed, when taken to an extreme, perhaps we are now entering the realm of “over-personalization”.

If you’ve ever fallen down the rabbit hole that is Wikipedia, and inexplicably found yourself on a random page hours later reading about something totally new and interesting to you, it should be easy to realize that this is also a very real and important part of marketing. Perhaps this kind of thing is what people like “Ad Contrarian”, Bob Hoffman, or marketers such as Professor Mark Ritson are saying when they talk about why in fact advertising on TV still matters. Advertising excels at reaching the masses with creative and memorable spots and campaigns, in a way that targeted marketing cannot by its very nature.

What the filter bubble shows is that it is important to approach things critically and despite the growing emphasis on personalization, we must keep in mind that other approaches have merits as well. Both highly targeted marketing (perhaps “hyper-targeted” is the better term in some cases) and traditional advertising have their places.

Digital Marketing 2018 Summary

The 10 concepts outlined above are just some examples of what marketers in Japan are anticipating to be important in 2018.

For many businesses, the biggest task in the coming year will most likely be efforts relating to digital transformation. However, as companies exist at all stages of the digital transformation process—with some further along than others—your organization may find one of the other items on the list to be more relevant to achieving your particular business goals in 2018.

Interested in learning more about how your company can improve its digital marketing efforts in Japan? Contact us to schedule a meeting to discuss your objectives and how we can help grow your business.

Archives

Related Posts

JR SKISKI Campaign Throughout their history, Japan Railways Group has produced some of the most memorable travel ad campaigns in Japan. Among their strongest—and most enduringly popular—are their winter season campaigns, and among these the Read more…

Does a Strong Domestic Market Make Japanese Brands Complacent? Japanese companies are heavily dependent on the domestic market. However, opportunities for growth within the country are limited for many industries given that the population is Read more…

The “Unique” Value Proposition of the Japanese Traditional Crafts Industry Kyoto has numerous businesses that have been in operation for hundreds of years, a large number of which are in the traditional crafts industry. I’ve Read more…